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Cabot Microelectronics Corporation Reports Solid Results for First Quarter of Fiscal 2013
  • Revenue of $106.5 Million
  • Gross Profit Margin of 47.0 Percent of Revenue, at Mid-Point of Full Year Guidance
  • Earnings Per Share of 41 Cents, Includes Adverse Impact of 7 Cents Due to Foreign Tax Adjustment

AURORA, Ill., Jan. 24, 2013 (GLOBE NEWSWIRE) -- Cabot Microelectronics Corporation (Nasdaq:CCMP), the world's leading supplier of chemical mechanical planarization (CMP) polishing slurries and a growing CMP pad supplier to the semiconductor industry, today reported financial results for its first quarter of fiscal 2013, which ended December 31, 2012.

Total revenue during the first fiscal quarter was $106.5 million, which reflects an increase of 4.3 percent compared to the same quarter last year and a decrease of 3.7 percent compared to the prior quarter. The company achieved a gross profit margin of 47.0 percent of revenue in the first fiscal quarter and diluted earnings per share of $0.41, which includes an adverse impact of approximately $0.07 associated with a tax adjustment related to operations of the company's facility in Korea since its opening in 2011. The company's balance sheet reflects a cash balance of $169.6 million and $168.4 million of debt outstanding as of December 31, 2012.

"I am encouraged with our first fiscal quarter financial results, which reflect performance solidly in line with our expectations that were shaped by persisting industry headwinds," said William Noglows, Chairman and CEO of Cabot Microelectronics. "Though we experienced soft industry conditions, continued macroeconomic uncertainty and the usual seasonality during the quarter, we achieved revenue increases in both our core CMP slurry and pad businesses compared to last year. Furthermore, our robust business model enables us to successfully run our business over a range of market conditions, and in the quarter we continued to prudently manage our operating costs and generate a strong gross margin despite the slight sequential decline in demand for our CMP consumables products."

Mr. Noglows continued, "In the face of continued macroeconomic uncertainty, the industry has shown positive trends including the continuing strong adoption of mobile devices. In order to leverage this growth opportunity and other positive long-term industry trends, we continue to partner with semiconductor industry leaders to further develop innovative technology that is vital to success in our business. Our focus on building our infrastructure and presence in the Asia Pacific region has significantly advanced these efforts. With continuing softness in the industry in the near term, we believe our ability to partner with our customers and leverage our global capabilities and CMP expertise positions us well for continued success as we further develop reliable, cost-effective solutions."

Key Financial Information

Total first fiscal quarter revenue of $106.5 million represents a 4.3 percent increase from the $102.1 million reported in the same quarter last year and a 3.7 percent decrease from $110.6 million last quarter. The company believes that the decrease in revenue from the prior quarter primarily reflects continued soft demand within the global semiconductor industry that began to appear late in the fourth fiscal quarter of 2012.

Gross profit, expressed as a percentage of revenue, was 47.0 percent this quarter, which is at the midpoint of the company's guidance range of 46 to 48 percent of revenue for the full fiscal year. This is lower than the 48.3 percent reported in the same quarter a year ago and lower than 48.6 percent last quarter. Compared to the year ago quarter, gross profit percentage decreased primarily due to certain higher manufacturing costs and a lower valued product mix, partially offset by higher sales volume. The decrease in gross profit percentage versus the previous quarter was primarily due to higher variable manufacturing costs and lower manufacturing yields, partially offset by lower fixed manufacturing costs and a higher valued product mix.

Operating expenses, which include research, development and technical, selling and marketing, and general and administrative expenses, were $33.4 million in the first fiscal quarter, representing a 1.8 percent decrease from $34.0 million in the same quarter a year ago. The decrease was driven primarily by the absence of professional fees related to the company's leveraged recapitalization with a special cash dividend that it executed during fiscal 2012. Operating expenses were $0.1 million higher than the $33.3 million reported in the previous quarter.

Net income for the quarter was $9.7 million, down from $10.4 million reported in the same quarter last year and down from $11.6 million in the prior quarter. Compared to the same quarter last year, net income was lower primarily due to a $1.7 million adverse tax adjustment associated with operations of the company's facility in Korea since its opening in 2011, and higher interest expense, partially offset by higher revenue, foreign exchange gains and lower operating expenses. Compared to the prior quarter, net income was down mainly due to lower revenue and a lower gross profit margin, partially offset by foreign exchange gains.

Diluted earnings per share were $0.41 this quarter, down from $0.45 reported in the first quarter of fiscal 2012 and down from $0.49 reported in the previous quarter. Earnings per share for the quarter were adversely impacted by approximately $0.07 due to the referenced tax adjustment.

CONFERENCE CALL

Cabot Microelectronics Corporation's quarterly earnings conference call will be held today at 9:00 a.m. Central Time. The conference call will be available via live webcast and replay from the company's website, www.cabotcmp.com, or by phone at (866) 700-0161. Callers outside the U.S. can dial (617) 213-8832. The conference code for the call is 79325109. A transcript of the formal comments made during the conference call will also be available in the Investor Relations section of the company's website.

ABOUT CABOT MICROELECTRONICS CORPORATION

Cabot Microelectronics Corporation, headquartered in Aurora, Illinois, is the world's leading supplier of CMP polishing slurries and a growing CMP pad supplier to the semiconductor industry. The company's products play a critical role in the production of advanced semiconductor devices, enabling the manufacture of smaller, faster and more complex devices by its customers. The company's mission is to create value by developing reliable and innovative solutions, through close customer collaboration, that solve today's challenges and help enable tomorrow's technology. Since becoming an independent public company in 2000, the company has grown to approximately 1,050 employees on a global basis.  For more information about Cabot Microelectronics Corporation, visit www.cabotcmp.com or contact Trisha Tuntland, Manager of Investor Relations at 630-499-2600.

The Cabot Microelectronics Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6902

SAFE HARBOR STATEMENT

This news release may include statements that constitute "forward looking statements" within the meaning of federal securities regulations. These forward-looking statements include statements related to: future sales and operating results; company and industry growth, contraction or trends; growth or contraction of the markets in which the company participates; international events, regulatory or legislative activity, or various economic factors; product performance; the generation, protection and acquisition of intellectual property, and litigation related to such intellectual property; new product introductions; development of new products, technologies and markets; natural disasters; the acquisition of or investment in other entities; uses and investment of the company's cash balance; financing facilities and related debt, payment of principal and interest, and compliance with covenants and other terms; the company's capital structure; and the construction and operation of facilities by Cabot Microelectronics Corporation. These forward-looking statements involve a number of risks, uncertainties, and other factors, including those described from time to time in Cabot Microelectronics' filings with the Securities and Exchange Commission (SEC), that could cause actual results to differ materially from those described by these forward-looking statements. In particular, see "Risk Factors" in the company's annual report on Form 10-K for the fiscal year ended September 30, 2012, filed with the SEC. Cabot Microelectronics assumes no obligation to update this forward-looking information.

CABOT MICROELECTRONICS CORPORATION    
CONSOLIDATED STATEMENTS OF INCOME    
(Unaudited and amounts in thousands, except per share amounts)    
       
  Quarter Ended
  December 31,
2012
September 30,
2012
December 31,
2011
       
Revenue  $ 106,533  $ 110,621  $ 102,122
       
Cost of goods sold  56,494  56,883 52,843
       
Gross profit 50,039  53,738 49,279
       
Operating expenses:      
       
Research, development & technical  15,316  15,401 13,755
       
Selling & marketing  7,109  7,288 7,336
       
General & administrative  10,954  10,572 12,901
       
Total operating expenses 33,379  33,261 33,992
       
Operating income 16,660  20,477 15,287
       
Interest expense 953  961 39
       
Other income (expense), net 854  (681) 104
       
Income before income taxes 16,561  18,835 15,352
       
Provision for income taxes  6,858  7,196 4,937
       
Net income  $ 9,703  $ 11,639  $ 10,415
       
Basic earnings per share  $0.42 $0.51 $0.46
       
Weighted average basic shares outstanding  22,845 22,920 22,508
       
Diluted earnings per share  $0.41 $0.49 $0.45
       
Weighted average diluted shares outstanding  23,658 23,706 22,926
     
CABOT MICROELECTRONICS CORPORATION    
CONSOLIDATED CONDENSED BALANCE SHEETS    
(Unaudited and amounts in thousands)    
     
  December 31,
2012
September 30,
2012
ASSETS:    
     
Current assets:    
Cash and cash equivalents  $ 169,619  $ 178,459
Accounts receivable, net   63,247  53,506
Inventories, net  62,879  66,472
Other current assets  15,165  19,451
Total current assets 310,910 317,888
     
Property, plant and equipment, net  119,390  125,020
Other long-term assets  75,481  74,917
Total assets  $ 505,781  $ 517,825
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY:    
     
Current liabilities:    
Accounts payable  $ 15,020  $ 19,542
Current portion of long-term debt  8,750  10,937
Capital lease obligations  --  2
Accrued expenses, income taxes payable and other current liabilities  26,755  32,738
Total current liabilities 50,525 63,219
     
Long-term debt, net of current portion  159,687  161,875
Capital lease obligations, net of current portion  --  19
Other long-term liabilities  10,443  9,121
Total liabilities  220,655  234,234
     
Stockholders' equity  285,126  283,591
Total liabilities and stockholders' equity  $ 505,781  $ 517,825
CONTACT: Trisha Tuntland, Manager of Investor Relations
         630-499-2600
         www.cabotcmp.com

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Cabot Microelectronics Corporation